Rocket Companies Surges 22.99% In Four Days As Technicals Signal Overbought Conditions

Rocket Companies (RKT) concluded the latest session with a 6.81% gain to $18.03, marking its fourth consecutive advance for a cumulative 22.99% rally. This surge reflects robust bullish momentum but warrants technical scrutiny across multiple frameworks to assess sustainability and key levels.
Candlestick Theory
The four-day rally features elongated bullish candles, with the most recent session (August 5, 2025) printing a high-to-close finish near $18.15 after testing $16.65 support. This pattern suggests strong buying conviction, particularly as the breakout eclipsed the prior July 23 swing high of $17.32. Resistance now converges near $18.89 – the October 16, 2024 peak – while immediate support rests at $17.32 (recent breakout level), followed by the four-day low of $16.65. A bearish reversal signal is absent, but the extended climb heightens exhaustion risk.
Moving Average Theory
The 50-day moving average (MA) slopes upward at $15.20, with the 100-day MA at $14.10 and 200-day MA at $13.85. Price currently trades 18% above the 50-day MA, signaling robust short-term momentum. The bullish sequencing (50-day > 100-day > 200-day) confirms a sustained uptrend. Sustained closes above the 50-day MA ($15.20) may reinforce trend strength, while a reversal below this level could signal near-term consolidation.
MACD & KDJ Indicators
MACD exhibits a widening positive histogram, reflecting accelerating bullish momentum after the 12-day EMA crossed above the 26-day EMA in late July. Meanwhile, KDJ registers overbought conditions, with the K-line at 88 and D-line at 82 – both above the 80 threshold. This divergence between MACD's momentum confirmation and KDJ's overbought warning suggests short-term exhaustion may develop despite the dominant uptrend. Traders should monitor for MACD histogram contraction or KDJ bearish crossovers as potential reversal alerts.
Bollinger Bands
Bollinger Bands expanded sharply during the rally, with price piercing the upper band ($17.90) on August 5 – a volatility signal often preceding continuation or consolidation. The 20-day moving average ($16.10) now acts as dynamic support. Bandwidth expansion supports trend validity, but a reversion toward the midline may occur if volatility subsides. Sustained closes above the upper band are statistically uncommon, suggesting the rally may slow.
Volume-Price Relationship
Volume surged to 55.98 million shares on August 1 during the initial 11.98% breakout, validating upward momentum. Subsequent advances maintained above-average volume (31.68 million on August 5), confirming participation. This volume profile supports trend sustainability. Conversely, any pullback on elevated volume could indicate profit-taking acceleration, with critical thresholds at the 50-day MA ($15.20) coinciding with the July 31 breakout volume spike.
Relative Strength Index (RSI)
The 14-day RSI calculates at 82, deep in overbought territory (>70). While this warns of short-term exhaustion, context is critical: RSI can remain elevated during strong trends. Bearish divergence would arise if price makes higher highs while RSI declines, but no such signal is present. The current reading suggests near-term consolidation or pullback is probable but does not invalidate the broader uptrend.
Fibonacci Retracement
Applying Fibonacci to the swing low of $14.50 (July 31) and high of $18.15 (August 5) yields retracement supports at $17.37 (23.6%), $16.76 (38.2%), and $16.33 (50%). These levels converge with technical supports: $17.32 (prior resistance) aligns with 23.6%, while the 50-day MA ($15.20) intersects the 61.8% level ($15.90). The $18.89 all-time high (October 16, 2024) represents major resistance, as a breach would signal resumption of the multi-year uptrend.
Confluence and Divergence Observations
Confluence at $17.30–$17.40 (Fibonacci 23.6% + prior resistance) establishes critical support. A breakdown here could trigger tests toward $16.30–$16.80 (Fibonacci 38.2–50% + 50-day MA). Divergence is noted between momentum oscillators (RSI/KDJ flashing overbought) and trend-following tools (MACD/MA alignment), suggesting short-term caution amid a bullish structure. Volume agreement and Bollinger expansion reinforce trend legitimacy, but RSI extremes warrant vigilance for consolidation.